Corner of Bay Street and Adelaide streets in Toronto. July 25, 2013.(Gloria Nieto/The Globe and Mail)

Fitch warns on Canadian banking sector outlook

JACQULINE NELSON

— The Globe and Mail

Published Monday, Nov. 25, 2013 5:00PM EST

Last updated Monday, Nov. 25, 2013 5:01PM EST

Fitch Ratings thinks Canadian consumers’ debt is unsustainable and that the housing market is somewhat overvalued. Developments such as these have made the ratings agency less optimistic than before about the outlook for the country’s largest financial institutions.

Canadian banks’ credit ratings are among the highest in the world, Fitch notes in its 2014 outlook report on Canadian lenders. But although 2013 was a better year than expected, the precarious Canadian housing market has caused the ratings agency to take a negative view of the sector next year.